India is hardly alone in seeking to drive underground money into the banking system. But the scale, pace and finality of Mr. Modi’s action make it a stunning and painful test of what had to this point been a largely theoretical debate.
“The great task that the country wants to accomplish today is the realization of our dream of a cashless society,” the prime minister said in a recent radio address.
For a country where few families pay any income tax and even large transactions are often completed in cash, the disruption has been significant—posing new risks for the world’s fastest-growing big economy and Mr. Modi’s popularity.
Home sales have flatlined in the month since the Nov. 8 announcement. Daily uproar by opposition parties has brought Parliament to a standstill. Tourists have been stuck mid-voyage, unable to tip or buy souvenirs. And there have been long, sometimes tense lines at banks and ATMs.
